You could be right. I suppose I assumed it because it literally says "auto-wrangle" right on the thing and you can wrangle them manually, so why not automatically? I think it used to work... maybe not.
Vole pups in a stable with a critter drop-off set to "auto-wrangle surplus" do not get auto-wrangled.
I think that pretty much explains it, here's a picture of them being not-wrangled, in case that's helpful.